Based on millions of dollars in first-quarter losses, Enfield’s STR Holdings Inc. said it is reorganizing and could shut its doors as it works to recover nonpayment from at least three clients in China.
Vice President and Chief Financial Officer Thomas D. Vitro reported in a U.S. Securities and Exchange Commission filing last week that STR is exploring options for restructuring its business, which makes material that insulates solar-energy-generating equipment.
In the quarter ended March 31, STR lost about $3 million, or 16 cents per share, about the same as the loss of $2.95 million, in the year-ago period.
Sales revenue also fell to $3.71 million in the first quarter, compared to $6.42 million in the year-ago period.
“We incurred bad debt expense of $2.6 million during 2016 and filed lawsuits against three customers of STR China for non-payment during 2016,” Vitro reported. “Other customers in China are significantly behind terms.”
Even if STR China prevails in court, payment is not assured, he said.
Costs to shut down STR’s Johor, Malaysia manufacturing facility, shuttered in 2015, totaled about $1.3 million. The company is in the process of selling the Malaysia facility and its equipment, he said.
As a result of these handicaps, Vitro said, the company is considering, “without limitation, the acquisition of another business, the divestiture of all or certain of our assets, joint ventures and other transactions outside the ordinary course of business.”
